White paper highlights best practices and benefits of outsourcing mailroom and mail center operations for large enterprises.

1. © The Outsourcing Institute
Transforming to the Mailroom of
the Future Today:
Digital Imaging and Automation Lower
Costs and Improve Quality

2. © The Outsourcing Institute 2
Year-after-year growth is good
news for a company's profit
centers. But unchecked growth of
a mailroom and other back-office
functions can leave the company
with bloated, expensive processes
that sap resources and distract the
company and its people from its
core business.
Changing market dynamics
require new approaches to
business process outsourcing.
Environmental factors, including
the economy, customer
expectations, new technologies
and a changing competitive
landscape force many companies
to implement incremental business
process changes in response. Yet
over time, such reactive changes
can result in a misalignment that
prevents the organization from
keeping pace with the market.
Instead, organizations that embark
on a path of proactive and
transformational business model
innovation can improve operations
by outsourcing recurring
processes. As a result, they enjoy
cost saving opportunities,
improved workflow efficiencies,
access to subject matter
experts and a sharper focus
on core competencies.
One such area of
improvement for many
organizations is the corporate
mailroom. Often the subject of
such incremental changes,
symptoms of a bloated facility
often include employees
struggling to manage
hundreds of thousands or
millions of inbound
correspondence –hard copy
mail, faxes, e-docs –every
month; oversized facilities with
furnishings and equipment
ill-suited to the job; and
tenured employees with
wages and benefits
significantly above
industry standard.
This high-volume drain
consumes costly capital
resources, from man-hours to
office space. Yet, it becomes
so entrenched that few
organizations seek a solution
to streamline and decrease
the burden.

3. © The Outsourcing Institute 3
The Power of a Digital Mailroom
The Digital Mailroom can deliver a
cost-effective, progressive solution
by utilizing technology and
innovation. High-speed production
scanners digitize and manage
physical documents (mail and
faxes) and electronic
correspondence (email,
attachments and text messages).
Originals can be sorted for short-
and long-term storage. All
documents are indexed, routed
and stored in an automated
process. Scanning and optical
character recognition (OCR)
reduce human touches. Document
bar coding negates manual
keystroking to track individual
correspondence, eliminating the
risk of lost or misplaced mail.
Electronic tracking of manual
processes allows managers to
know who touched what
correspondence when.
The introduction of technology, as
well as more sophisticated mail
sorting equipment and furnishings
specifically tailored for mailrooms,
further improve sorting and
workflow. This also reduces the
facility’s size and the number of
people required to run mailroom
operations. With most mailroom
transformations, between 20%
and 50% of cost savings are
achieved through payroll reduction
and process improvement.
Done well, digital mailroom
business process outsourcing and
knowledge process outsourcing
can improve what is a vital
function for a variety of companies
beset by high-volume inbound
correspondence. The most
common category-specific tasks
include financial services
correspondence, healthcare and
medical claims processing and
management, and freight bill
processing. Common functions
also include inbound
correspondence management,
high-volume scanning and
typing, indexing and general
data processing.
Making the Mailroom of the
Future a Reality
The process required to outsource
mailroom operations, though, is
little different from outsourcing
other non-core operations:
Recognize and identify the
problem, issue an RFP seeking a
vendor skilled in helping
implement an innovation-based
solution, ensure a cultural fit
across both organizations, and
work toward a mutually
satisfactory future together.
Step One: Identify the Problem
For many organizations, the
bloated mailroom hides in plain
sight. Long entrenched and
seemingly smooth-running, it
nonetheless is a drain on
resources. Managers and
supervisors believe they’re running
a well-tuned operation; to wit, fear
of change often is a major obstacle
to an organization even
entertaining the notion of BPO.
Other issues include inability to
identify suppliers, and worries
about sending materials or
manpower beyond the company’s
walls – either to a supplier’s
facilities in the U.S. (onshore),
Canada or Mexico (nearshore) or
overseas (offshore). All concerns
can be allayed by recognition of
the problem – and admission of a
need for remedy.

4. © The Outsourcing Institute 4
Step Two: Situation Analysis by
Consulting Engagement
Once an organization realizes a
problem exists, it then must
identify and invite providers by a
Request for Proposal to review
and analyze its current processes,
suggest remedies and implement
a solution. The RFP should
identify those BPO functions
under review. In a mailroom, this
includes document management,
document storage, scanning,
archival/retrieval, and numerous
downstream processing functions.
The organization should assemble
a review team comprised both of
mailroom and executive
management – including any who
have been involved in outsourcing
reviews in the past. Ask whether
the prospective partners follow
industry standards, whether they
embrace industry certificationsfor
data security and privacy (such as
PCI-DSS and HIPAA), and have
well established quality and
process management protocols.
Though effective in helping narrow
a large pool of applicants, a
simple RFP often is insufficient in
finding the right vendor
candidates. Instead, the
organization should seek a
Consulting Engagement.
Consulting engagements can run
from several days to several
weeks (some providers, like
DATAMARK, will engage in a two-
to three-day engagement free of
charge to help analyze an
organization’s pain points and
potential remedies).
During this analysis, a provider
reviews processes – including
those overlooked in the original
RFP, and benchmarks the current
throughput, quality and process
replication efficiency. The provider
then suggests improvements,
including proactive quality control,
random checks that encourage
efficiency and scalability of the
process. Using Lean and Six
Sigma process quality
management methodologies,
providers help create a leaner
organization that removes
touches, overstaffing and waste;
improves quality; and creates an
ongoing, lean exercise to
continually improve upon gains.
Step Three: Ensure
a Cultural Fit
BPO is no longer about offloading
a commoditized process.
Functions outsourced today are
complicated and dynamic, and
require an ongoing intimate
relationship between buyer and
provider. It’s essential that the two
share a common perspective of
value and culture.

5. © The Outsourcing Institute 5
When selecting prospective
partners, cultural cohesion is as
critical as mission competence and
price reductions. For example, one
DATAMARK client is well-known as
an employee-focused employer.
Layoffs that would achieve
employee reductions were contrary
to the client’s core beliefs. Working
together, DATAMARK and the client
achieved projected reduction levels
through redistribution of existing
employees, early retirement (which
reduced the company’s obligations
under its generous benefits
package) and “re-badging” of client
staff as DATAMARK employees.
The level of senior executive
involvement is another way to
determine a provider’s commitment
to culture. Outsourcing
engagements are complicated and
challenging. They also can be
confusing to the client. Involvement
by executive leadership, from the
senior vice president down to an
onsite project manager, shows a
commitment to mutual success.
How well a provider assuages a
client’s concerns about location can
help cultural alignment. Some
clients fear loss of control or
introduction of data vulnerability by
moving a mailroom facility offsite.
The provider, instead, can create a
blended “hybrid” solution that
utilizes both existing client and
provider facilities. Mail and digital
documents can be received, sorted,
opened, scanned, indexed and
routed at the client location – as
managed by an on-site project
management team. In time, as the
client becomes comfortable and
confident with the process, the
vendor’s on-, near- or offshore
facilities can be introduced, reaping
additional cost benefits through
labor arbitrage. This “crawl, walk,
run” strategy advances opportunities
as the client becomes more willing
to accept and embrace them.
Step Four: Mutually Beneficial
Solutions
At its best, BPO is the pursuit of
innovation for continuous
improvement for a complicated
process. Innovation pays higher
dividends and gains increased
relevance for the client, especially
those who drive BPO providers to
deliver beyond the commodity and
continuous improvement expected
as part of the timeliness and quality
assurances found in the Service-
Level Agreement. Innovation is
derived beyond the contract. It’s
generated when both organizations
collaborate on a commitment to
continued improvement.
The typical BPO contract is not
drafted to encourage innovation.
Yet, the best contracts successfully
motivate both to innovate above
the SLA.
BPO Benefits Beyond Price
Successful BPO historically has
been about cost abatement: Send a
process to a professional in pursuit
of lower cost of service. Today,
savvy outsourcers know low cost
doesn’t lead to innovation or
process improvement. Cost can
eliminate outliers at the RFP stage.
But skill sets, experiences, process
management expertise and well-
vetted references can help
determine the best provider and
cultural fit for each engagement.

6. © The Outsourcing Institute 6
Outsourcing relationships once were
a two- or three-year engagement.
Today, they commonly begin at five
years, and successful relationships
often renew several times.
By starting with a consulting
engagement the prospective client
can ask important questions,
challenge the provider, determine
the cultural fit, and ultimately
overcome internal resistance.
The right experience, technology,
cost, culture and a commitment to
ongoing success – between
organizations that “speak the same
language” in pursuit of a common
goal – can drive success across the
engagement. Whether for a
mailroom or any BPO operation, the
result can be a first class solution.

7. The Outsourcing Institute
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USA
Phone: (516) 279-6850 - 712 Fax: (516) 706-2855
www.outsourcing.com
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